« October 16, 2005 - October 22, 2005 | Main | October 30, 2005 - November 05, 2005 »
I'm proud to report that I landed an exclusive interview with Treasury Secretary John Snow. Sort of.
Having never had much luck getting non-press people at Treasury to comment on the record about Social Security and budget matters -- for any of the venues I write for -- I figured I'd pop a question into the "Ask The White House" hopper. Yesterday's participant was Treasury Secretary John Snow. Click here and scroll down for our exchange.
daniel, from westport, ct writes: Can you tell me how much of the excess Social Security payroll taxes -- payroll taxes collected by the government but not spent on benefits -- have been spent on government operations in the past five fiscal years? And if Social Security is facing a crisis, why were those funds spent on government operations?John Snow
Thanks for this terrific question, Daniel. The total amount of Social Security surpluses that have been spent on other programs is at $1.7 trillion today. It’s a bad habit that government has, of borrowing money from the Social Security fund and writing itself “IOUs.” I think it’s time to put a stop to that, don’t you? That’s why the President wants to let younger workers put their Social Security dollars in personal accounts – the ultimate “lock box” for their hard-earned retirement dollars.We also need to make the program solvent. Progressive benefit growth, which would bring the program about 70 percent of the way to solvency, is another important element of the President’s proposed changes. It would mean that the lowest income seniors would have the fastest-growing benefits while benefits for those who are more well-off grow more slowly, with protection from inflation.
Thanks again for this question, Daniel. Addressing the problems of Social Security is one of the keys to ensuring a strong economic future for this country.
Posted by dan at 10:43 AM
Nope. No inflation around here. Especially not in energy intensive businesses.
Kevin Allison provides the latest non-evidence in the Financial Times.
"Strong pricing power helped Dow Chemical Company beat Wall Street expectations on Thursday with a 30 per cent increase in third-quarter profits. . . .Geoffery Merszei, chief financial officer, said that high feedstock and energy prices had contributed to a “tough quarter”, but Dow overcame rising costs by passing them along to its customers. The company said it had raised prices 12 per cent, leading to a corresponding 12 per cent increase in revenues."
Posted by dan at 08:34 AM
I wonder if the mythic Polish plumbers, who became an issue in France's vote against the new EU Constitution, had anything to do with this.
Adam Jones reports in the Financial Times:
France Telecom yesterday cut its sales growth forecast for the year, blaming an erosion in the customer base of its Polish residential business. The partly state-owned French group's shares fell 6.2 per cent.However, in Poland France Telecom said customers had been shunning fixed-line connections to rely on their mobile telephones. Like-for-like sales at its Polish residential business fell 7.9 per cent in the third quarter.
Like-for-like sales for its mobile division in Poland had grown by 13.1 per cent, but not enough to compensate for the decline in fixed-line revenue, France Telecom said.
The French company, owner of the Orange mobile telephone brand, also said it would reshuffle its assets in Poland. It is selling its 34 per cent stake in Centertel, Poland's second-biggest mobile telephone operator, to TPSA for 4.88bn zlotys ($1.49m).
Posted by dan at 08:30 AM
Who gets better terms on the international credit market, Vietnam or General Motors?
It's close, but as of yesterday, I think the nod goes to Vietnam.
Joanna Chung and Amy Kazmin of the Financial Times report.
"Vietnam yesterday raised $750m with its debut government bond offering and opened a gateway for the communist-ruled country's entry into the international financial markets.Demand was so strong for the dollar-denominated bond - which got the go-ahead after nearly 10 years of internal deliberation - that the government managed to raise funds more cheaply than expected, in spite of recent volatility in the bond markets. Investors put in orders totalling $4.5bn, six times the amount on offer.
During trading in New York yesterday, the 10-year bond, whose offer size earlier this week had been bumped up from $500m, was priced to yield 7.125 per cent, tightened from an initial guidance of 7.25 per cent. That is 2.564 percentage points more than US Treasuries of similar maturity, although less than other similarly rated credits, such as Indonesia and the Phillipines."
According to the highly useful Trace corporate bond data site, General Motors Acceptance Corp. bonds that mature in December 2014 are currently priced to yield 7.355 percent.
Posted by dan at 08:26 AM
Former General Electric CEO Jack Welch clearly knew a thing or two about the proper pricing of assets and products in a global marketplace. But when it comes to his own home, it's a different story.
In 2002, Welch put his mansion in neighboring Fairfield, Ct., on the market for $13 million, and got no takers. In the past three years, prices of real estate at all levels in these parts have risen, probably by about 10 percent per year. But Welch hasn't been able to find any serious bidders. Now he's been forced to cut the price again.
The Wall Street Journal notes:
"The price on Jack Welch's Fairfield, Conn, house has been cut again--this time to $8.4 million from $9.5 million. General Electric's former chairman and chief executive originally put the eight-bedroom, nine-bath house on the market at $13 million, in 2002. . . .Mr. Welch's house has a new listing agent, the fourth since it went on the market."
I'm guessing this is the house.
Posted by dan at 07:29 AM
Houston, and Chicago, we have a problem. Ratings for the World Series sucked. To make matters worse, it only lasted four games.
Joe Flint writes in the Wall Street Journal:
"The Chicago WHite Sox's four-game World Series sweep over the Houston Astros produced the lowest telvision ratings on record for the Fall Classic, and Fox's television network didn't meet ratings guarantees it promised to advertisers.The World Series averaged about 17.2 million veiwers and drew a record low rating of 11.1, a 30% decline from the 25.4 million viewers and 15.8 rating that the Boston Red Sox-St. Louis ardinals Series averaged a year ago, according to Nielsen Media Research data. A rating point represents approximately 1.1 million homes."
Take heart advertisers. Ratings were down, but prices were up.
"Fox was able to charge about $350,000 for a 30-second spot, compared with $330,000 last year."
Posted by dan at 07:22 AM
Pretty soon, only us old folks will be getting their telephone service via land line from legacy phone companies.
Stunning line buried in Verizon's latest quarterly report.
Dionne Searcey writes in the Wall Street Journal:
"Verizon lost 523,000 residential phone lines, a decline of 6.2%, compared with the third quarter last year. The company is losing phone customers at a rate that is slightly ahead of its phone-company competitors, likely because Verizon goes head-to-head in its Northeast terrritory with two of the most aggressive cable companies, Cablevision Systems Corp. and Time Warner Inc."
Posted by dan at 07:17 AM
Great article in today's New York Times by Jenny Anderson on how activist hedge fund Steel Partners won the battle against management at asset manager BKF Capital Group, but lost the war. Steel managed to use its stake to bully its way onto the board of directors, but apparently didn't realize it was dealing with an asset management business in which a few employees could take most of the company's assets out the door with it. And now what started out as a quick no-brainer trade has evolved into a long-term turnaround effort--a task at which hedge funds haven't exactly distinguished themselves. Oops.
Posted by dan at 07:14 AM
When discussing the Prius and the potential of hybrid cars, critics--generally U.S. car makers--generally focus on the fact that the gas savings don't make up for the higher price people have to pay for the hybrids. That may be true in the short-term.
But gas isn't the only operating cost associated with a car. If a car breaks down, or needs repairs frequently, that adds to the operating costs. There's the cost of maintenance, and the cost of your time spent taking it to and from the dealer. Lets say your time is worth $100 an hour, and driving a hybrid saves you 15 hours a year in time--fewer trips to the gas station, fewer trips to the dealer, etc.--then the investment would pay of in two years, regardless of how much you save on gas.
And guess which car requires the fewest trips to the mechanic?
Karen Lundegaard reports on the Consumer Reports reliability survey in the Wall Street Journal:
"Of the top 31 most reliable vehicles, 15 were from Toyota and Lexuc and eight were from Honda. The most reliable 2005 model? The Toyota Prius hybrid car, with only 4% of drivers having to take the vehicle into the dealership for service."
Posted by dan at 10:38 AM
The Russians are invading Mississippi! And they're bringing several hundred million dollars!
Peter Marsh reports in the Financial Times:
In a project that will be widely watched in the global steel industry, Severstal, the large Russian steelmaker, is taking a majority stake in an $880m venture in the US to make steel sheet for automotive bodies.Such a large investment in the US by a Russian industrial company is highly unusual. The project will also put the spotlight on 20-year-old German technology for making steel from scrap metal that has never delivered steel to the high quality required for the exposed parts of vehicles. . . .
Posted by dan at 10:31 AM
It's a good thing that inflation is contained to the food and energy sectors, and not seeping into the larger economy. Otherwise there would be real inflation.
So what to make of the strong quarterly reports of railroads Norfolk Southern and CSX.
Daniel Machalaba reports in the Wall Street Journal:
Norfolk Southern Corp. and CSX Corp. reported gains in third-quarter profit, buoyed by rising freight rates that helped offset higher costs from more-expensive fuel and from hurricane disruptions.The two railroad companies pointed to continued strength in the U.S. economy. With tracks covering the Eastern third of the country, they are considered a barometer of economic activity because they carry a range of materials from coal and lumber to consumer goods in shipping containers. Earlier this week, railroad company Burlington Northern Santa Fe Corp. reported a large third-quarter profit gain.
"After years of price declines, they are finally able to get across-the-board rate increases," said Anthony Hatch, an independent transportation analyst in New York.
Norfolk Southern, based in Norfolk, Va., said third-quarter net income increased 4.5% to $301 million, or 73 cents a share, from $288 million, or 72 cents, a year earlier. Net income in the 2004 third quarter included a gain of $53 million, or 13 cents a share, from completion of a corporate reorganization of its share of the former Conrail. Revenue increased 16% to $2.16 billion from $1.86 billion.
CSX, Jacksonville, Fla., said net income in the third quarter rose 33% to $164 million, or 72 cents a share, from $123 million, or 55 cents. Revenue increased 9% to $2.13 billion from $1.94 billion.
Both companies said they are capitalizing on strong demand and tight supply of rail transport to make rate increases stick. Meanwhile, their chief rivals, the trucking companies, are struggling with higher costs because of a shortage of truck drivers.blockquote>
Posted by dan at 10:28 AM
MOST PROFITABLE, NOW BIGGEST
Toyota provides proof that you don't have to give away your cars to build volume.
David Ibison and James Mackintosh report in the Financial Times:
Toyota Motor is poised to become the world's largest carmaker, ousting General Motors of the US from the top spot, according to a new business plan to be released in December.The plan is expected to state that Toyota aims to make more than 9.2m vehicles in the year to March 2007 - a figure that should allow it to surpass GM if the US carmaker continues to suffer from falling sales and is forced to cut production further. GM made 9.1m vehicles last year, and last week predicted a fall of about 20,000 units this year.
Toyota is already the most profitable carmaker in the world, having reported a net profit of Y1,171bn ($10.1bn) in the year to March 2005, while profits at GM and Ford have been hit by a series of financial difficulties. GM last week reported a net loss of $1.63bn in the third quarter.
Posted by dan at 10:25 AM
October 26, 2005
GASBAGS
This is rich stuff. Carl Hulse of the New York Times reports on the brilliant new strategy of Republican Congressional leaders to reduce oil prices: begging.
WASHINGTON, Oct. 25 - After forcing through two pieces of legislation with significant benefits for the oil industry this year, House Republican leaders on Tuesday called for oil companies to return the favor by building new refineries and taking other steps to increase fuel supply and lower gas prices."It is time to invest in America," said Speaker J. Dennis Hastert, who said that in a period of soaring industry profits, "we expect oil companies to do their part to help ease the pain American families are feeling from high energy prices."
The decision by Republicans to take aim at an industry that is typically a chief ally reflected mounting anxiety among lawmakers about the political fallout from soaring fuel prices.
It came as House Republicans continued to find it difficult, on another front, to move forward with budget cuts they hoped to showcase as evidence of renewed commitment to smaller government. . .
Mr. Hastert and other senior Republicans said they did not intend to try to force the industry into action and were not considering a new tax on oil profits. But they said the industry needed to take steps to prevent price gouging and to show Americans that some of the gains were being put back into projects that could aid consumers being squeezed at the pump.
"If you couple that with the fact that we are seeing record profits by the oil companies," said Representative Eric Cantor, Republican of Virginia and chief deputy to Mr. Blunt, "there are questions being raised by our constituents across America wondering how such a situation could exist."
Earth to Rep. Cantor: it's called the free market. And it's how the American system works. Indeed, as Holly Yeager reports in the Financial Times, House Speaker Dennis Hastert stepped a bit on his colleague's line by holding up the oil companies' massive profits as a ringing affirmation of all that makes this country great:
"Oil and gas compniaes are enjoying record profits," said Dennis Hastert, speaker of the House. "That is fine. This is America."Posted by dan at 09:25 AM
LACK OF DEPTH
Caroline Daniel and Christopher Swann of the Financial Times make a good point about the void left by the appointment of Ben Bernanke.
"When Ben Bernanke clears out his desk, he will leave unfinished work: as chairman of the Council of Economic Advisers, he will not sign off on the Economic Report of the President, the annual tome that charts US economic progress. The administration will miss not only his signature but also his role as a useful but relatively low-profile defender of George W. Bush's economic policies.This will mean there is one less voice out there . . . It is crucial to have a solid economic voice in the White House," says a former administration economist.
Mr Bernanke's departure for the Federal Reserve points to a lack of strong and influential economists across the administration, the person says. "Of the new people who have now been finally confirmed at the Treasury, none is trained as an economist. There is no one in the White House now, with the exception of the two young CEA nominees who are not yet confirmed, who has a good understanding of economics. . .
"The administration's goal has been to have the president be the spokesman for the economy," says Kevin Hassett, economic policy director at the conservative American Enterprise Institute. "They have not been willing to let other people do that, so there has been less demand for a Robert Rubin-type person. Since 2001 everyone has been waiting for an economic voice to emerge and it hasn't."
The lack of a strong bench of communicators, doing the Washington talk shows or tramping the country talking up the economy, has its downsides. Although the economy has been growing above trend for the past two years, Republican strategists remain baffled why Mr Bush gets so little credit for it. A Washington Post poll this month found that just 32 per cent rated the economy excellent or good, compared with 66 per cent who rated it fair or poor.
Nevertheless, few analysts expect Mr Bush to appoint a powerful CEA chairman to replace Mr Bernanke. Indeed, Harvey Rosen, member of the council from 2003 to 2005 and chairman between March and June this year, argues that the absence of a dominant economic policymaker is no bad thing. "Economic policy in the Bush administration is generated in a collegiate fashion," he says. "The NEC co-ordinated, and there was input from the CEA, the Treasury and relevant agencies."
Collegiate? With all the reckless shenanigans we've seen in the past several years, maybe Faber College.
Posted by dan at 09:17 AM
NEW ECONOMY/OLD ECONOMY
Sometimes the new economy looks a lot like the old economy. One of the reasons Amazon.com and other online retailers were supposed to crush bricks-and-mortar retailers was that their hyper-efficient, asset-light operations would run at significantly higher operating margins.
Oops. Amazon.com's disappointing third-quarter results are in. And if you back out a $40 million charge for a legal settlement, it looks like the company had operating income of $95 million on sales of $1.86 billion, or about 5.1 percent.
That's not bad. (In the second quarter, Barnes & Noble had about a 2 percent operating margin, although that's after a hefty charge for depreciation and amortization, which Amazon doesn't seem to take.) But it's down from the previous year. And as the company's sales continue to rise, and competition continues to increase, the margin seems to be slipping.
Posted by dan at 09:08 AM
WAL-MART WOES
Great piece of reporting by Steven Greenhouse and Michael Barbaro on Wal-Mart's scrooge-like attitude toward employee benefits in the New York Times.
Posted by dan at 08:57 AM
MINDING THE STORE
Some of the air has come out of the investment thesis of buying poorly performing retailers in the hopes of liberating the valuable real estate that lies under them.
Ryan Chittum of the Wall Street Journal gives some indication as to why that may be the case:
"The U.S. retail real-estate market showed signs of slowing in the third quarter as vacancies moved higher but it wasn't enough to damp rents, according to a new study.The higher vacancies are likely to reinforce investor concerns that weaker consumer spending means retail real estate has peaked.
Shopping-mall rents rose 0.9% in the third quarter -- the fastest pace in two years -- to $38.08 per square foot per year from $37.75 in the second quarter, according to the survey of the top 67 U.S. markets, excluding New Orleans, by Reis Inc., a New York-based commercial real-estate research firm. The vacancy rate moved to 5.4%, up from 5.1% in the previous quarter.
Rents at strip malls were up 1% to $18.23 a square foot in the third quarter from $18.05 in the second quarter. The vacancy rate edged up to 6.8% from 6.7% in the second quarter as absorption -- the net change in occupied space -- slowed from its high second-quarter pace. Tenants absorbed 6.8 million square feet in the quarter, down from 9 million square feet in the second quarter.
In a potential sign of trouble in retail, 16 of the 67 markets surveyed had net decreases in occupied space at strip malls during the quarter as consumers appeared to pull back on spending, said Lloyd Lynford, chief executive of Reis. The total decrease in occupied space among the down markets was about twice the total decrease among down markets in the second quarter.
Also, the pace of strip-mall construction is picking up. This year, 31.5 million square feet are expected to be built, but Reis expects that to jump to 37 million square feet next year, causing the vacancy rate to edge up to 7.1% by the end of next year.
The vacancy increase in shopping malls came as retailers pulled back expansion plans because of expectations that consumer spending will be hurt by rising energy prices this winter, Mr. Lynford said. At strip malls, he said, "the combination of an upturn in supply at the exact time when challenges are emerging on the demand side spells more challenging times for investors … than they've seen in the last three or four years."
Posted by dan at 08:55 AM
October 25, 2005
DEPT. OF UNINTENDED CONSEQUENCES
Large banks have never been particularly good about customer service. So it apparently never occurred to senior banking executives that if you lobby Congress to change the laws so as to make life much more difficult for your customers, they might respond in ways that make life more difficult for you. Case in point: the new bankruptcy law, which went into effect last week.
Eric Dash has the goods in the New York Times.
For more than eight years, big banks lobbied aggressively to make it harder for consumers to file for bankruptcy.Now that the new bankruptcy law has taken effect, was the investment worth it? The early data suggest that sometimes, you have to be careful what you wish for.
Bankruptcy filings were supposed to snowball in the months before the tough new law went into effect on Oct. 17. But the avalanche of petitions, and the lines of debtors streaming out the courthouse doors caught even the credit card issuers who supported the new law by surprise.
In recent days, the five biggest bank issuers of credit cards have said that the unexpectedly large flood of filings shaved hundreds of million of dollars off their earnings in the third quarter.
But with tens of thousands of petitions still being processed and Hurricane Katrina's impact on cardholders still being sorted out, the bankruptcy rush is likely to result in well over a billion dollars worth of losses by the end of the year.
"We thought it would cause a bubble," James Dimon, the president of J. P. Morgan Chase, said last week. "The bubble is just bigger than we thought." . . .
More than 500,000 Americans filed for bankruptcy protection in the 10 days before the law took effect on Oct. 17, according to estimates by Lundquist Consulting, a research firm in Burlingame, Calif. That is roughly a third of the total number of bankruptcies filed in 2004. And though the number is expected to soon slow to a trickle, some bankruptcy courts were so inundated with filers that thousands more could be counted this week.
As a result, many banks have found themselves warning that the bankruptcy rule changes would have a big impact on fourth-quarter profits. And executives concede the bottom-line benefits of the new law will now take longer to materialize.
"This by far exceeded our expectations, this spike in bankruptcies," said Alvaro G. de Molina, the chief financial officer of Bank of America, which will become the nation's largest issuer of credit cards when its acquisition of the MBNA Corporation is complete. "But again, all it is is a period issue," he added.
"All this is doing," he said, "is bringing people to the table faster. And if they bring them faster, maybe the losses are less. For the long term, it is neutral to positive."
Still, some analysts said they were unsure.
"The banks are saying that we expect bankruptcy-law-related losses will subside because of the rush to file," said David A. Hendler, an analyst with CreditSights, an independent research firm based in New York. "But the undertone of credit quality is worsening."
Even before bankruptcy filings began rising this spring, an American Bankers Association survey of 350 member institutions found that credit card delinquencies had been increasing when measured by the number of accounts past due. (When measured by dollars lost, it has declined). In September, it reported that the rate rose to a record of 4.81 percent during the second quarter, driven in large part by the higher price of gasoline. And it is not expected go down anytime soon.
The losses are particularly troublesome for the nation's biggest banks, where credit cards have become powerful profit engines over the last few years while overall industry growth has slowed. Credit card issuers face myriad challenges, including stiff price competition, the need for costly reward programs, and declining direct mail response rates. And with rising interest rates, every issuer is seeing their profit margins squeezed.
J. P. Morgan Chase, the second- largest credit card issuer, said it was now setting aside an additional $100 million this quarter to help absorb the bankruptcy losses expected next quarter. Mr. Dimon estimated about $500 million more than usual might be lost next quarter when the bulk of the bad debts are written off.
Citigroup, the third-largest issuer, said the spike in bankruptcies caused its North American credit card division to write off an additional $200 million in pretax credit costs during the third quarter. Ms. Krawcheck warned that the surge could reduce earnings by $500 million next quarter . . . . ."
Posted by dan at 03:57 PM
LEE SCOTT KENNEDY
Wal-Mart CEO Lee Scott channels Ted Kennedy, advocating a higher minimum wage out of enlightened self-interest. He finally realizes there's a connection between the minimum wage failing to rise over the past ten years and Wal-Mart's stock failing to rise over the past five years.
Ann Zimmerman reports in the Wall Street Journal:
"But Mr. Scott, noting that minimum wage hasn't changed in almost a decade, described Wal-Mart's core customer base as finding it increasingly difficult to afford basic necessities between paychecks."We simply believe it is time for Congress to take a look at the minimm wage and other legislation that can help working families."
Posted by dan at 03:52 PM
VALUE PRICING
Well, that didn't last long. Several weeks ago, the Big Three said they'd stop the ruinous practice of offering gimmicks like 0% financing, massive rebates, and employee discounts to cover for the fact that buyers weren't willing to pay anywhere near sticker price. Instead, they'd just change the sticker price. The new strategy was dubbed value pricing.
But sales are off again, so they're going back to the well.
Gina Chon reports in the Wall Street Journal:
Car companies are having a hard time weaning buyers off of big discounts.After this summer's sales bonanza driven by employee-pricing discounts, domestic auto makers had been hoping to boost profits by reducing the widespread discounting. But with sales soft, they are now returning to costly incentives. The latest discount wrinkle is in the form of free gas.
General Motors Corp. this month began switching to so-called value pricing that lowers sticker prices and cuts back on cash discounts. But when sales slumped in October, GM began offering $500 gas cards to buyers of its sport-utility vehicles and $500 rebates on 2006 full-size pickup trucks. Certain 2006 models received higher rebates, including $2,500 cash back for Buick Rendezvous and $3,500 cash back on the Chevrolet Tahoe.
In recent days, Ford Motor Co. has resorted to offering zero-percent financing or up to $5,000 cash back to boost sales of some 2005 models. Now some Ford dealers in the Chicago area are throwing in up to $750 in free gas. Ford is also offering discounts on some 2006 models, such as $2,000 cash back on the Explorer and $1,500 cash back on the Escape. DaimlerChrysler AG's Chrysler Group is also offering zero-financing deals and up to $5,000 cash back on both 2005 and 2006 models. The Town & Country for 2006 comes with $2,500 cash back or zero financing for 36 months, while the Dodge Durango and Ram 1500 for 2006 has a $5,000 cash-back offer or zero financing for 36 months.
For consumers, the biggest advantage to value pricing is that it eliminates the haggling with dealers that many find unsettling. The sticker price in value pricing is non-negotiable, and leaves no question that one buyer paid the same price as the next. Value pricing also generally works out to be a better deal for consumers, mainly because it gives the vehicle a higher resale value and in many cases includes extra features without extra costs.
The problem is that "value pricing" isn't true market pricing.
Posted by dan at 02:27 PM
October 24, 2005
BEST AND BANAL-EST
Shawn Donnan of the Financial Times bemusedly follows Karen Hughes to Indonesia.
Karen Hughes, the recently installed chief guardian of America's image abroad, yesterday faced hostile questions about US foreign policy and the war in Iraq from a group of Indonesian students as she launched a south-east Asian leg of her campaign to woo the Islamic world.Facing 16 pre-selected students in a dimly lit and half-full auditorium at Jakarta's State Islamic University, the former White House spokeswoman tried to ease her way into the discussion: "My state of Texas is very big," she told the students. "So you can imagine my surprise to learn that your country, Indonesia, is three times bigger than my big state of Texas."
She was immediately confronted by a barrage of questions on topics ranging from Iraq and US policy to Israel to racism in the US and the very legitimacy of George W. Bush's presidency given his first term was the result of a Supreme Court ruling.
Can't someone just give her a copy of the CIA World Factbook, so she can skip the whole here's-a-factoid-that-shows-how-little-I've-bothered-to-learn-about-your-country-in-my-decades-on-this-planet portion of her presentation and get right to the part where the ungrateful locals condemn U.S. policy? It seems like it would save a lot of time.
Posted by dan at 08:35 PM
EYES TURNING BROWN
Who's the biggest New York-based media pro/b.s. artist with a book and a show on an NBC network?
In an excerpt from his new book, TrumpNation, which appeared in the New York Times on Sunday, Timothy O'Brien says it's Donald Trump. Hands down.
Inauguarating his new column in Fortune, Devin Leonard makes the case for Donny Deutsch.
Posted by dan at 08:30 PM
BLUE MOON ALERT!
Useful and interesting content on the Wall Street Journal editorial page. Writer John Schnapp chronicles GM's woes, and casts a wary eye on the folks exercising oversight over management.
Inadequate corporate governance. A company like GM badly needs a board with at least a core group of directors able to advise and evaluate management from their own successful turnaround experiences. The central GM directors have not. George Fisher, the chief executive's main confidante, left Eastman Kodak after having been unable to halt its downward spiral. Eckhard Pfeiffer drove Compaq into a ditch. Percy Barnevik virtually destroyed engineering giant ABB and tried to flit away with an $88 million pension. Karen Katen is a vice-chairman of Pfizer, whose share price collapse has paralleled GM's, and for many of the same reasons. The only GM director who had reinvigorated a sickly company, A.G. Lafley of Proctor & Gamble, quietly withdrew from its board in April. The board, quite simply, is the wrong kind of board for a company facing GM's needs.Posted by dan at 08:25 PM
ALL THE TEA IN CHINA
You mean to tell me that an until-recently totalitarian Communist dictatorship that has comparatively little experience in free markets and has an insolvent banking system may be fudging its numbers? Don't tell Tom Friedman.
Richard McGregor writes in the Financial Times. ($ required.)
China's gross domestic product growth figures, released late last week, have revived longstanding scepticism about Chinese official statistics and their accuracy as a gauge of activity in the world's fastest growing economy.The GDP figures recorded growth from July to September at 9.4 per cent, almost exactly on par with the first two quarters, which came in at 9.4 and 9.5 per cent respectively.
Economists said the smooth growth this year and also in late 2004 were suspicious because they were so at odds with other economic indicators. Jim Walker, an economist with CLSA, the brokerage, in Hong Kong, said the official GDP statistics were a "fantasy world".
"The Chinese economy expanded 9.4 per cent year-on-year, basically the same as in the first and second quarters, despite the fact there has been a major deterioration in the external contribution from the second to the third quarter that should have chopped GDP growth substantially," he said in a research note.
China's trade surplus dropped substantially in September, something many economists expected to register in the third quarter because of the relatively high contribution of net exports to growth this year.
Posted by dan at 08:23 PM
OWNERSHIP SOCIETY
A piece of stunningly bad news, from Louis Uchitelle's piece in the Sunday New York Times:
“Thus far this year, the median weekly wage earned by blacks fell by 5 percent, to $523, adjusted for inflation, according to an analysis of Bureau of Labor Statistics data. Whites as a group are also experiencing a drop in their median weekly wage, but for them the decline this year is less than 1 percent, to $677, adjusted for inflation.”And the Republicans wonder why their poll numbers among African-Americans are so horrid?
Posted by dan at 08:19 PM
October 23, 2005
INFLATION NATION
If you ignore the stuff that's getting more expensive, there's no inflation. My "Economic View" column in today's New York Times.
Posted by dan at 07:54 AM